If Your Investment of $5000 with the Bank Carries a Compound

question 70

Multiple Choice

If your investment of $5000 with the bank carries a compound interest of 8.75% per annum,the value of your investment at the end of three years is:

• A) $1430.69
• B) $6312.50
• C) $6430.69
• D) $5437.50

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Definitions:

Altman's Z-Score

A formula used to predict the likelihood of a business entering bankruptcy within two years, based on various income and balance sheet values.

Bankruptcy Risk

The risk that a company will be unable to meet its debt obligations and forced to seek protection under bankruptcy laws.

Default Risk

The risk that a borrower will not make the required payments on its debt obligations.

Common-Size Financial Statements

These are financial documents where all line items are expressed as a percentage of a specific figure from the statement, facilitating ratio analysis and comparability.